The banking giant could be directing some of its massive $12 billion investment in technology to Blockchain and DeFi-related developments.
JPMorgan investment bank CEO Jamie Dimon acknowledged that blockchain technology and decentralized finance (DeFi) could be of great use. Dimon, who has long been a skeptic of Bitcoin and cryptocurrencies, modestly praised the distributed technology to shareholders. News outlet Forbes picked up excerpts from the letter.
"DeFi and Blockchain are real, new technologies that you can deploy both publicly and privately, permissioned or not," the executive commented, highlighting some of the benefits of adopting the technology.
We believe there are many uses where a blockchain can replace or enhance contracts, data ownership, and other functionality; however, for some purposes.
JPMorgan invests in Blockchain
The chairman of one of the leading U.S. financial institutions shared his views shortly after a JPMorgan earnings call. The bank announced plans to increase its annual technology budget to $12 billion, up 26% from what it spent in 2020, according to TearSheet.
Dimon's letter came in response to shareholder requests for more concrete plans to invest those resources. While the CEO did not provide detailed information on the investment areas, he did preview some of the places where this money could go. He said it would be invested mainly in the bank's maintenance, optimization, and innovation solutions.
Some of these [technology] investments are needed to maintain the business's health. Investments in this bucket help keep the ship tip-top shape and address a wide range of needs.
Dimon mentioned a range of technologies such as artificial intelligence (AI), cloud-based systems, Blockchain, and decentralized finance (DeFi), hinting at some of JPMorgan's investment areas for its colossal budget this year.
"We use the Liink Blockchain network so banks can share complex information. We also use a Blockchain to move tokenized dollar deposits with JPM Coin," the chairman said of Blockchain, a sector on which he assured the bank remains "at the forefront." However, he also added that, for some purposes, Blockchain technology is "currently too expensive or too slow to implement."
Dimon is a Bitcoin skeptic
Dimon has spoken well of digital currencies' technology. Two years ago, he anticipated that Blockchain would play a pivotal role in the future of finance and assured that the bank would always back this innovation.
"Blockchain itself will be fundamental to helping people move money around the world more cheaply... We will always support Blockchain technology," he said during the DealBook conference held in late 2020, organized by the New York Times. However, despite this favorable stance, he has remained critical of Bitcoin.
"It's not my cup of tea," the JPMorgan CEO commented. He reiterated his disinterest and boldly asserted that "Bitcoin is worthless" when the asset's price challenged $56,000. He also contested the limited supply of the flagship cryptocurrency during a December event last year.